Xerox Holdings has raised its offer to buy HP by $2 to $24 per share on Monday, following several rejections of its previous buyout offer by the PC maker.
Xerox said its latest offer comprises $18.40 in cash and 0.149 Xerox shares for each HP share — valuing the company at about $35 billion — and that it plans to launch a tender offer on or around March 2.
The U.S. printer maker first made a $33.5 billion cash-and-stock offer for HP, a company more than three times its size, in November. HP’s board had then rejected the offer, saying it significantly undervalued the company.
“This bid increase puts more pressure on Xerox to extract costs as a combined entity. I’d look for HP to question the economics of the synergies after Xerox raising their bid,” Morningstar analyst Mark Cash said.
Xerox said last month it planned to nominate 11 independent candidates to HP’s board and that it had secured $24 billion in financing for the offer.
The company also expects its proposed acquisition to result in sales growth of as much as $1.5 billion for the combined company, according to a presentation by Xerox in December.
In December, investor Carl Icahn, who has 4.2 percent stake in HP and 10.9 percent stake in Xerox, urged HP shareholders who had agreed to the merger to reach out to the PC maker’s directors for immediate action.